What JUST happened with Apple's Lawsuit | The Truth.

folks so we've got some bad news on uh

apple and this has to do with a court

case between epic games and apple let's

go ahead and take a look at first the

stock let's see how apple is performing

today uh because really we we had a lot

of pain in the markets today all indices

read we've got apple down 3.31

which for apple that is a very big move

i wonder if google's following it

because google's got a few anti-trust

lawsuits and i wouldn't be surprised if

you had a little bit of a shift in

google as well google yeah look at that

down two percent because of court

rulings uh against apple uh carrying

over uh to to some weight against uh

google essentially

so uh yeah take a peek at this i mean

this is uh this is a sharp drop for

apple here we've had sharp drops before

but uh look two percent on on something

like i'm sorry three point three percent

for apple that's a lot so uh let's take

a look at why and a bloomberg has a full

story on it right here

apple stands to lose a few billion

dollars annually from ruling oh it's

just a few billion dollars just a few

let's take a look

so what this has to do with is uh app

store purchasing so remember that if you

sign up for a subscription through

an apple device

apple gets 30 percent of that revenue

and why does that matter well it matters

because let's say apple uh has a netflix

app and you sign up for netflix at

netflix.com and you pay 9.99 on netflix

let's call it 10

if you sign up through apple apple would

get 30 of that so it's kind of like

netflix is still providing all the

service right but just because it was

done through the apple store netflix

would get 30

this new ruling would make it so

essentially netflix could in the app say

hey look if you sign up on our website

you can sign up for 10 a month if you

sign up through your iphone because it's

convenient we're going to charge you

approximately let's say 13 and 30 cents

right to offset that so anyway uh let's

take a look at the actual bloomberg

article on this and see what some of the

details are around this so and this

would apply obviously to games apps

subscriptions i mean even newspaper

subscriptions in fact some of you wonder

like hey how come i can't press the join

button on youtube from my iphone or ipad

as many of you know that for example in

in this stream here uh because we're

live streaming this there's a live chat

on the side and members can chat in it

this is a great way to minimize spam and

uh you can only join

uh the membership which is like 4.99 a

month if you sign up through a desktop

browser like you can't sign up through

the iphone or an ipad and a lot of

people are frustrated by that they're

like come on youtube like let me sign up

through

the iphone or the ipad and google's like

we ain't paying the 30 for apple so

screw apple it's basically a big middle

finger to apple from google so this has

been something that's been an issue

ongoing so

apple has been ordered to make the most

significant change to its app store

business model since launching the

platform in 2008 which by the way i had

an iphone the day the app store came out

which was the day before the iphone 2

came out which back then was the iphone

3g

uh

and uh which sounds like third

generation but that that was the old

sell signal 3g was cool back then okay

3g was like oh my gosh that's fast today

it's like

but anyway

and it could cost the tech giant a few

billion dollars annually in a ruling

friday a u.s district judge said that

the company must allow developers to

bypass its commission on in-app

purchases

that's incredible because this is a

judge going out of the way saying hey

you know what apple you've created a

platform that consolidates millions of

people into one store it's kind of like

let's say you have the sawgrass mills

mall in florida you bring all these

people to yours to your mall

and all the stores inside benefits so

when you do a party or you do an ad

campaign for your mall or you hire a

musician to to perform at the mall or

whatever everybody goes to to that mall

and the bet the stores their benefit

right that's that's the argument with

apple it's apple has this collected

captive audience of folks and so really

a judge here has said i don't care

if you can be in this mall and not have

to contribute to apple even though

they're consolidating people in in that

space right now i i see both arguments

here and this is touchy but this is a

really bad ruling for app stores which

is probably also why google is getting

whacked is they also have the android

app store

uh but uh yeah i mean look apple takes

30 commissions on on fees

processed through the app store for for

bringing people to the app to bring

people to the ecosystem

uh this ruling which it could be

overturned right it could still be

overturned so to be determined i would

expect that this will get appealed we'll

see

this includes letting ios apps use quote

buttons external links or other calls to

action to direct customers to other

purchasing methods other than apple's

payment system i mean this is like the

kiss of death honestly for the 30

commission in my opinion because if i'm

an app developer which we have an app

right we've got the meet kevin app you

can

what i download to

uh i'm going to sell a service in my

meet kevin app let's say i don't know

you get the stock alerts let's say it's

100 bucks a month or something like that

if if i had to pay apple a 30 commission

well after this ruling rather than you

just checking out with apple pay right

there like bloop oh you've subscribed

rather than that

i could just have a little pop-up that

goes hey click this link to sign up on

my website and then it'll redirect you

back to the app and it'll get unlocked

right that's i mean of course as a

business i would do that to cut apples

30 out but now i'm free writing right

i'm using apple's platform without

really while making money without

contributing back to the platform so i

don't i don't know this is a pretty

damaging ruling honestly uh i i wouldn't

be surprised if this gets um

this gets overturned because

i mean i don't know i mean at what point

does does this this marketplace that

apple has created become kind of like a

public domain right

it's a blow to apple but one that's the

world's most valuable company well yeah

of course apple can absorb it that's

helped investors take the decision in

stride although the shares fell as much

as 3.5 percent the court has affirmed

what we've long known the apple app

store is not in violation of apple uh of

antitrust law

and success is not illegal okay so apple

did not lose here right it's just one

part of the lawsuit really hurts apple

uh they you know they won the ruling

against uh epic

but uh more importantly was what ended

up happening to apple's app store

potential revenue but anyway here's some

details apple's adversary in the trial

epic games the maker of fortnite

contended that that the judge sided with

apple this isn't a win for developers or

consumers says epic apple's commissions

from the app store generated 6.3 billion

dollars last year with most of it coming

from in-app purchases and subscriptions

that 6.3 bill could literally go to zero

uh i mean like why would a developer

share now why would anybody be motivated

to pay apple to 30

apple's gonna have to figure out okay

well how can we like what can we do to

entice people to still buy through apple

right uh maybe they lower their

commissions to 10 or something like that

to still make it easy and desirable for

people to use it it's a it's a problem

because once people transition away to

their own payment systems why would they

ever go back to even paying that 10

percent big mess

that money is what's at stake as games

and other apps prepare to steer

customers away from apple's ecosystem

earlier apple said it would allow

developers

of so-called reader apps to point users

to outside purchasing methods that

category includes things like netflix

spotify news and so on but the decision

friday means the rule will have to apply

to games and other categories basically

everyone

apple said it's too early to determine

how or exactly what changes will be

implemented gaming apps accounted for 70

of all app store revenue and wow that's

crazy that gaming accounts for

70 of the rev and this is kind of like

epic games argument like hey like if

we're selling people

skins in the game for ten dollars let's

say why are you taking three dollars of

all those skins

you didn't uh design it you know you had

nothing to do with selling it or

advertising that skin other than just

having this domain where the app is

hosted but that's just because we're

trying to provide a game on the iphone

as well just like we provide the game on

on android or pcs and it's a little bit

of messy it's a messy one apple made

about 3.8 billion in revenue from games

in 2020 most of which came from in-app

purchases

but even if the ruling ends up costing

apple a few bill a year that's still a

fraction of its total revenue in 2021 a

year the company in 2021 the company is

estimated to bring in more than 360

billion yeah that might be true but keep

in mind the revenue that apple gets from

the app store is significantly higher

margin than the other revenue remember

if apple sells you

air pods for i don't know what they cost

now 250 or whatever apple's probably

gonna profit somewhere around fifty

dollars like that's what they're gonna

bring to the bottom line is fifty

dollars on those right but if apple

sells 250 worth of commissions on games

on their app store i mean come on what

is that going to cost apple that's going

to be like a 97 profit margin right

they're going to take like 242 dollars

of that to the bottom line so there's a

huge difference there uh so it's it's

not as i mean like that 6.7 billion

dollars or whatever could be worth as

much as uh

i mean i would say as much as four times

uh in product revenue they might have to

sell 25.6 billion dollars worth of ipads

and iphones to make up for that loss in

commissions that they just got burned

out of uh so that's that's very

important to consider uh let's see uh

yeah that's true here's this is another

option uh y'all right in the chat here

it's not free writing if there's a

developer fee that's true maybe every

developer who wants to be part of the

ecosystem has to pay to play now you

know that's possible the judge did not

rule that out hey apple could just say

look everyone who's listed in our app

store you have to pay x dollars per

month and they can quickly get that

money back

at least some of it probably not as much

as they used to the ruling states that

apple must let developers communicate

with the customer through points of

contact this is like having a pop-up

saying hey join our email list or go to

our website to check out or whatever the

ruling ultimately means epics fortnite

will come back to the app store the game

was originally removed last year for

using its own payment method bypassing

apple's fees so this is in in essence

the the judge said like this is okay

like this this is this lawsuit between

epic uh epic games and apple has now

essentially allowed this separate

payment platform to be used everywhere

and again

that's very very high margin revenue

that just went out the door big big big

loss for apple uh it's it's like i think

bloomberg is downplaying this i mean

they're downplaying i wonder if apple's

like one of this person's big holdings

or something sorry that's jaded i should

take my tinfoil hat off i'm sorry mark

but seriously apple stands to lose a few

billion dollars annually from really

like even the title's like that's just a

few billion dollars right i made that

joke earlier uh or or even what they

mentioned over here where they compare

the six point three billion okay now

four whatever to uh to the 360 billion

the company's gonna bring in right

important differences here and

differences matter the ruling could

ultimately yeah okay well we're going to

come back that's fine ruling is believed

to mean that users would be able to make

purchases via the web rather than having

a com

competing oh they typoed bloomberg typo

gotcha uh competing payment system in

the apps themselves this means epic

would need to build a website to let

users make purchases and include a link

to that website okay so that's a little

bit less ideal right like it'd be nice

to just in the app be able to click buy

and then apple pay checkout but in that

case apple gets their commish this would

have to have a totally different link to

where it opens up safari and then

reopens the app but for 30

developers will do that i mean how hard

is it you make a single splash page

click the link you could probably still

buy with apple pay honestly because it's

separate from the app store right uh and

and and just revert right back like have

a little a single line of code that just

reopens the app after checkout is

complete and then a message that pops up

and says thanks for your purchase your

purchase was successful your features

are now unlocked or whatever like this

this should be very easy to develop it

should be no problem for developers to

handle really doesn't apply to the

revenue that apple previously lost uh

the ruling uh the judge ruled that epic

owes apple for missed fees 3.7 million

dollars all this for 3.7 million okay

apple has argued that it's tight control

the app store helps protect

consumers and prevent developers from

swindling users interesting still

analyzing the decision which is 180

pages long but the headline is that

apple's app store business model has

been validated i mean obviously apple's

taking the the high road to this

approach here but yeah look this gives

you some details on what the heck is

happening here with uh with apple and um

hopefully you find that i found that

helpful if you like my kind of

perspective on this stuff make sure to

hit that red subscribe button and turn

it gray uh all right thanks for watching

this part on apple

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